Gay realtor Tampa Bay wants home buyers to know that great credit scores are more than just a “necessary evil” when it comes to buying a new home. The credit scores that are used to calculate the terms of your mortgage, including your interest rate, are determined completely by this simple three digit number.
The original purpose of the credit score, that now seems so much like a burden that prevents some hard working people from owning a home, was actually to protect users of credit. It was invented to help detect fraud in credit or insurance applications. The system was invented in the early sixties to prevent Diners Club members from having their cards used by non-holders. There were no computers and just one credit check involved phoning your bank manager and everyone else that you know to see if you were credit-worthy.
Nowadays the information on a credit report is used to predict whether or not you are likely to default on a loan or declare bankruptcy. The number is also used by insurance companies to calculate risks because studies have shown that those with poor credit are also voted most likely to make a large insurance claim.
Yet another original purpose of the credit score was to help advise a creditor, lender or collection agency on just how much you are likely to be able to settle for if you fail to pay off an account. That is why so many collection agencies procure your report. They are trying to determine how much you are worth if you become broke.
Gay realtor Tampa Bay would also like to advise newcomers to the credit report game that not all lenders like a creditor who pays down their balance to zero on time every month. This means that credit companies would not be able to collect late fees, penalties and high interest on the cards that they offer to you. In fact, having slightly bad credit actually makes you a “person of interest” to lending companies because they know you will always want to borrow more to pay what you already owe and that you will pay a higher interest rate to maintain your lifestyle. Most North Americans fall into this category of borrowers.
Another thing that your credit score tells lenders is how open you are to new offers and whether or not you are likely to respond to a direct mail solicitation for credit cards or how willing you would be to be blasted by emails or telemarketing calls so that you can be sold even more credit products.
All credit scores are created by the same company: FICO. This stands for Fair Isaac which is the last names of the two men who invented the system of credit scoring in the sixties. The formal name for it is the Fair Isaac Credit Organization. Gay Realtor Tampa Florida advises you to stay in good standing with this organization and make sure that your credit report is always accurate because 100% of mortgage lending organizations use them to determine whether or not you are eligible to buy a house.